Board- Pardon my "direct" comments this evening.  It's just that I am so freakin' tired of these new posters;. Asking questions that could well be answered by the "Search" function.  No bona fide candidates here, IMO. Sometimes us vets' just need to put it out there, as it really stands.  As I've stated, it is what is it is.

TJ

[quote=mktsystms] [quote=mikebutler222]

I have no idea what the real success rate (as measured by stilling being in the biz 5 years later) but I wonder if it isn't the case that the training programs do as well as is possible, since the job is just plan hard. There's no perfect way to teach people the different skills required to handle client money well AND GET client money.[/quote]

Getting client money and managing client money are obviously two completely different sets of disciplines and skills.  What's surprising to me, is that the "team" system, or a "partner" system are so rare in the industry. If it was any other business, you would have a guy outfront doing the sales, and a different guy in the backroom doing the management of the assests. Trying to be a one-man-show almost never works in any business, and I think that's why most FAs fail. 
[/quote]

Their are teams within the business. These are as you describe. We call them hunter/skinner partnerships. It's a business model that can be quite successful. However, with it comes its own set of problems. Most of these are of the marriage variety. When it ain't workin it gets ugly. That said, most of the partnerships I know of are quite successful with the workload divided by individual strengths. In fact I am part of the most danerous of these types of partnerships, I'm married to my partner. This is  definately not recommended as it brings with it its own set of challenges. Least of which can be switching into business mode after a frosty night on the couch. Luckily, that doesn't happen too often.

Still, the standing business model, individual FA, has very little to do with the high washout rate. Simply put, this is a tough business. If it was easy we'd be making one tenth of what we make. There are so many variables present, determining success and failure, that there is no single reason for either. These variables range from timing to expectations to financial to ability to work ethic. And to purposely sound like a broken record, sales ability. If you can't sell, don't apply. Much of the problem, in my opinion, is the destressing of the business as a sales process. This is more true today than ever before. Images of working together to find wealth management solutions just don't gel with the words sell, pitch and close. Yet pitching something is no more than presenting a solution, simple or complex to a problem. Closing is presenting that solution as the answer to the problem and asking for the client's agreement to implement that solution. Selling is the entire process of deconstructing a client's financial situation, analyzing the situation to find the coverage gaps, presenting the solution and asking for permission to move forward. Yet mention selling to the suits in NY and they'll tell you they don't sell. And they don't support selling as a process. To me it's a fundemental disconnect that leads to a higher than necessary failure rate.

I think Mike makes a good point about the training departments. I never really looked at it that way before.

For an outsider looking in you seem to have very good insight into the core business issues facing an FA trainee. This makes you either very bright, or not who you present yourself to be. Either way, use what you gain here, if anything, to make this work for you.

[quote=mktsystms] [quote=The Judge]

mktsystms- No offense but your posts are getting weaker by the....post.

Actually, you can have a "partner" w/out having an actual business partner.  It's called a good mutual fund(s) and SMA's.  Gets' the job done. 

[/quote]her

Then you don't have your own brand.  You're just another salesman, selling the same thing that tens of thousands of other FAs are selling.  What makes your business different, if you're sellling the same product that everyone else is selling?
[/quote]

These guys will get very angry when you ask questions such as "Why should a customer allow you to dip your hand into their pocket for a fee to do nothing?"

In their mind they are managing money because they are telling you to stay with the Smegma fund for another year as if you were not bright enough to grasp that yourself.

I see it as a fad that will fail with the first winds of a protracted bear market.  It's been twenty-five years since the market experienced anything that is a true test of investor's willingness to accept losses quarter after quarter after quarter with smiles on their faces.

The business has thousands of Alfred E Neuman types pretending that they are financial advisors because their clients are not losing money at a time when nobody is losing money.

[quote=BondGuy]Much of the problem, in my opinion, is the destressing of the business as a sales process. This is more true today than ever before. Images of working together to find wealth management solutions just don’t gel with the words sell, pitch and close. Yet pitching something is no more than presenting a solution, simple or complex to a problem. Closing is presenting that solution as the answer to the problem and asking for the client’s agreement to implement that solution. Selling is the entire process of deconstructing a client’s financial situation, analyzing the situation to find the coverage gaps, presenting the solution and asking for permission to move forward.[/quote]

Wow, that’s really great stuff.  I really like the way you explained that.

However, the one thing I see missing is what I think is probably the biggest obstacle that I will face if I sign on to MS.  That obstacle is finding qualified people who will allow me to go through that “process” with them in the first place.  I have no doubt in my abilities to do what you just explained (because I’ve done that sort of thing all my life in one form or another,) but I do have a lot of doubt in my ability to find enough prospects. (because I have never ever done anything like that at all.)

[quote=BondGuy]

For an outsider looking in you seem to have very good insight into the core business issues facing an FA trainee. This makes you either very bright, or not who you present yourself to be. Either way, use what you gain here, if anything, to make this work for you.[/quote]

[quote=Soon 2 B Gone]These guys will get very angry when you ask questions such as “Why should a customer allow you to dip your hand into their pocket for a fee to do nothing?”[/quote]

Even if they have selected someone else to do the day to day managing of the portfolio, they are not simply doing nothing. I liken it to a contractor who is hired to build or remodel a house.  Most people don’t have the knowledge, connections, time, or patience to find all the sub-contractors to do the worked required.  It’s the same thing when it comes to building or remodeling their financial house.

[quote=Soon 2 B Gone]

In their mind they are managing money because they are telling you to stay with the Smegma fund for another year as if you were not bright enough to grasp that yourself.[/quote]

I see it as a fad that will fail with the first winds of a protracted bear market.  It's been twenty-five years since the market experienced anything that is a true test of investor's willingness to accept losses quarter after quarter after quarter with smiles on their faces.[/quote]

[quote=Soon 2 B Gone]

The business has thousands of Alfred E Neuman types pretending that they are financial advisors because their clients are not losing money at a time when nobody is losing money.[/quote]

[quote=mktsystms]

The decline from 2000 to 2003 was nasty.  While it may not have lasted as long as what happened in the 70s, it sure was more severe as far as percentage decline. 

[/quote]

The decline from 2000 to 2003 was significant, but investors did not blame their advisors because much of it was linked to the 9/11 attacks.

Those who lost money in the tech bubble were hearing that they would have a very difficult time convincing anybody that they should not have known that it was as crazy as the Tulip craze of the 1600s.

No doubt things like, "Let's put some lipstick on this pig and sell it" were capable of laying the groundwork for significant arbitration claims--BUT the events of September 11th made the idea of suing because some broker misled you seem shallow, dare I say greedy.

The decline in the large cap stocks that followed 9/11 was "just one of those things" and most of us just rode it out.

My point is valid.  The last time financial advisors were held personally responsible for what was going on in client's portfolios was the 1968 to 1982 bear market.

Since September, 1982 the market has gone straight up with a couple of toe stubs along the way.

The mini-crash from 2000 to 2003 was a combination of not unexpected and collateral damage from an act of war.

The true test of the fad of stealing money from your client every quarter because you had the good fortune of having turned in a mutual fund order years ago will not sit well with investors in the long run.

It's easy to swallow the fee when the market is going up--but when your 12% loss is coverted to a 13% loss because your "advisor" steals 1% for their "advice" it will irritate the hell out of anybody with an iota of common sense.

Had Wall Street dreamed up this boondoggle idea in 1968 instead of 1998 there would be no brokerage houses left.

If I sell you a mutual fund I am entitled to a commission for having made the sale.  It is obscene to suggest that I am entitled to a percentage of what you have in your account forever more simply because of that action so long ago.

You can see the handwriting on the wall when you pay attention to the Schwab ads that are being run--the woman reading her statement and asking "Do they think we're too dumb to know we're being nickeled and dimed?"

If you're a real financial advisor you will attempt to look five, ten, twenty years down the road--I spent my entire career trying to do that--and what you'll see is exceptionally user friendly on-line sites that will be able to offer advice that is impartial and as professional as the most professional advisors can offer today.

Quite possibly at no cost--paid for by advertisers who will want you to consider their fund, their ETF, their annuity, their whatever.

[quote=Soon 2 B Gone]

In their mind they are managing money because they are telling you to stay with the Smegma fund for another year as if you were not bright enough to grasp that yourself.[/quote]

'Ol Putsy longs for the "good old days" when brokers were "real managers" (wink, wink) with a list of 5 stocks every client had to own, and then sell (or the broker starved to death). No thought of tax consequences, why should they, they didn’t even provide clients with cost basis info.

The funny part is every time we start down this road he fixates on the FA charging a fee to run mutual funds (the least efficient model) and ignores that even in that model while paying a fee, the client avoids numerous others, like loads, 12b-1s and even has access to institutional funds to lessen their total fee structure.

He's willfully ignorant and those are the worst form of stupid.

Along with this long term bull market… How old would one have to be to remember the last big decline in real estate. Can you say about 45!!! Think about it.



In the late 80’s the buyer would have been maybe 25 so that is 18 years ago. So they would be 43, most more then 43.



So after a .com bubble we have a real estate bubble. Amazingly after one month of good readings with inflation we are in the clear, BS! Today inflation was up so that makes a trend of 20 of the past 22 months. Is the government analysis in on this? How about these wonderful big boys on wall street who could never say sell during .com.



I suppose all of the real estate money will now be dumped into the market. It is like a cyclical market of .com/merges, housing, oil/gold, stocks… Money just gets passed around and dumped as average Joe moves in. Now the big problem is avg Joe can’t refinance an over valued home or file bankruptcy.

[quote=Soon 2 B Gone]

The decline from 2000 to 2003 was significant, but investors did not blame their advisors because much of it was linked to the 9/11 attacks. [/quote]

Only someone who hasn't had to face clients can say something that stupid. I guess, the issue of "blame" aside, Putsy can't imagine people wanting to go 100% to cash...

[quote=Soon 2 B Gone]BUT the events of September 11th made the idea of suing because some broker misled you seem shallow, dare I say greedy.[/quote]

And, of course, no one (and no lawyer, surely) has even appeared "greedy"...

[quote=Soon 2 B Gone]Since September, 1982 the market has gone straight up with a couple of toe stubs along the way.[/quote]

"A couple of toe stubs" in retrospect, those of us who actually deal with people know the trauma really involved when there's no 20/20 hindsight available, yet.

[quote=Soon 2 B Gone]

The true test of the fad of stealing money from your client every quarter because you had the good fortune of having turned in a mutual fund order years ago will not sit well with investors in the long run. [/quote]

I guess Putsy doesn't know how long funds have been paying trails AND for some reason, thinks people would prefer massive front loads. Yeah, that's the ticket.

[quote=Soon 2 B Gone]It's easy to swallow the fee when the market is going up--but when your 12% loss is coverted to a 13% loss because your "advisor" steals 1% for their "advice" it will irritate the hell out of anybody with an iota of common sense.[/quote]

Ahhh, Putsy, somehow he just doesn't know how the fee structure works. Even before fee business began clients were paying ongoing fees. I guess if he wasn't told, he was happy...

[quote=Soon 2 B Gone]If I sell you a mutual fund I am entitled to a commission for having made the sale.  It is obscene to suggest that I am entitled to a percentage of what you have in your account forever more simply because of that action so long ago.[/quote]

Who says there should be a commission? Why should you be stuck in a single fund family? Why should you pay a 12b-1? Why should you not have access to the cheapest (institutional version) of that fund? Why shouldn't you be able to avoid all the fees I mentioned AND walk away from an FA you think isn't doing a good job?

[quote=Soon 2 B Gone]You can see the handwriting on the wall when you pay attention to the Schwab ads that are being run--the woman reading her statement and asking "Do they think we're too dumb to know we're being nickeled and dimed?"[quote]

Didn't Schwab (actually they're dead on their feet, just haven't fallen, but that's another story) and the deep-discounters put us out of business 15 or more years ago? Seems to me I heard Putsy's "Why pay" stream way back when, when $8 trades were going to run us out of business. Didn't happen, did it?

[quote=Soon 2 B Gone]If you're a real financial advisor you will attempt to look five, ten, twenty years down the road--I spent my entire career trying to do that--[/quote]

You spent your entire career sucking revenue off of people who succeeded at being an FA. Something you had already failed at. Given how little you seem to understand of client's the trauma of market downturns and current pricing structure, I'd say you were pushed out to pasture a long, long time ago.

[quote=Soon 2 B Gone]..

and what you'll see is exceptionally user friendly on-line sites that will be able to offer advice that is impartial and as professional as the most professional advisors can offer today.

Quite possibly at no cost--paid for by advertisers who will want you to consider their fund, their ETF, their annuity, their whatever.

[/quote]

Right "impartial" and run by advertisers. Aside form that bit of fantasy (and the nonsense of "professional" from a website or an 800 number)what you've described is a discounter website or Vanguard.

Now, how long have they been around?

[quote=AirForce]

So after a .com bubble we have a real estate bubble. Amazingly after one month of good readings with inflation we are in the clear, BS! .[/quote]

We don't have a real estate bubble and we don't have real inflation worries. Want to worry? Consider the strong possibility of a recession next year.

[quote=Soon 2 B Gone]

[quote=mktsystms]

The decline from 2000 to 2003 was nasty.  While it may not have lasted as long as what happened in the 70s, it sure was more severe as far as percentage decline. 

[/quote]

The decline from 2000 to 2003 was significant, but investors did not blame their advisors because much of it was linked to the 9/11 attacks.

Those who lost money in the tech bubble were hearing that they would have a very difficult time convincing anybody that they should not have known that it was as crazy as the Tulip craze of the 1600s.

No doubt things like, "Let's put some lipstick on this pig and sell it" were capable of laying the groundwork for significant arbitration claims--BUT the events of September 11th made the idea of suing because some broker misled you seem shallow, dare I say greedy.

The decline in the large cap stocks that followed 9/11 was "just one of those things" and most of us just rode it out.

My point is valid.  The last time financial advisors were held personally responsible for what was going on in client's portfolios was the 1968 to 1982 bear market.

Since September, 1982 the market has gone straight up with a couple of toe stubs along the way.

The mini-crash from 2000 to 2003 was a combination of not unexpected and collateral damage from an act of war.

The true test of the fad of stealing money from your client every quarter because you had the good fortune of having turned in a mutual fund order years ago will not sit well with investors in the long run.

It's easy to swallow the fee when the market is going up--but when your 12% loss is coverted to a 13% loss because your "advisor" steals 1% for their "advice" it will irritate the hell out of anybody with an iota of common sense.

Had Wall Street dreamed up this boondoggle idea in 1968 instead of 1998 there would be no brokerage houses left.

If I sell you a mutual fund I am entitled to a commission for having made the sale.  It is obscene to suggest that I am entitled to a percentage of what you have in your account forever more simply because of that action so long ago.

You can see the handwriting on the wall when you pay attention to the Schwab ads that are being run--the woman reading her statement and asking "Do they think we're too dumb to know we're being nickeled and dimed?"

If you're a real financial advisor you will attempt to look five, ten, twenty years down the road--I spent my entire career trying to do that--and what you'll see is exceptionally user friendly on-line sites that will be able to offer advice that is impartial and as professional as the most professional advisors can offer today.

Quite possibly at no cost--paid for by advertisers who will want you to consider their fund, their ETF, their annuity, their whatever.

[quote=Soon 2 B Gone]The decline from 2000 to 2003 was significant, but investors did not blame their advisors because much of it was linked to the 9/11 attacks.[/quote]

Wow, is this ever a tired argument.  How many times are you going to say this, without anything but anecdotal evidence to back it up?  Trust me...there were plenty of people who didn't feel the least bit patriotic about their losses.  I spent many months doing little but having the same conversation again and again with fearful and angry clients...and I was using a balanced/value strategy for all but the most aggressive clients...imagine how tough it was for someone who sold the crap out of Putnam Voyager?!!

There were two good things that came from the 00-02 bear...

1.  Many brokers who should have been, were weeded out, and those of us that survived learned a lot about working with clients to maintain positions/strategies during difficult markets.

2.  Client expectations finally came back to earth and I didn't have to hear how wonderful those Janus/index funds were anymore.

The decline from 2000 to 2003 was significant, but investors did not blame their advisors because much of it was linked to the 9/11 attacks.

Huh?  Most of the decline occurred PRIOR to 9/11.  The market had been going down for over a year BEFORE 9/11. 

[quote=Soon 2 B Gone]

The decline in the large cap stocks that followed 9/11 was "just one of those things" and most of us just rode it out.[/quote]

[quote=Soon 2 B Gone]

My point is valid.  The last time financial advisors were held personally responsible for what was going on in client's portfolios was the 1968 to 1982 bear market.[/quote]

[quote=Soon 2 B Gone]

The mini-crash from 2000 to 2003 was a combination of not unexpected and collateral damage from an act of war.[/quote]

The true test of the fad of stealing money from your client every quarter because you had the good fortune of having turned in a mutual fund order years ago will not sit well with investors in the long run.[/quote]

[quote=Soon 2 B Gone]

You can see the handwriting on the wall when you pay attention to the Schwab ads that are being run--the woman reading her statement and asking "Do they think we're too dumb to know we're being nickeled and dimed?"[/quote]

The 00-03 decline was in two steps.  The tech bubble burst first.  As with any "crash" there is a tendency to hold your breath and hope it will come back--the holding the breath period lasted for six months or so.

Finally people began to come to grips with the reality that the Nasdaq was not going to go back.  Those who are predisposed to blame somebody else began to look for lawyers to take their cases--that was during the summer of 2001.  Lots of lawyer letters were being written--so far demands for arbitration were still not much of a reality.

Then the attacks occured and even lawyers who stood to gain 1/3 of whatever they could recover realized that the entire process was going to play out against their best interests.  Panels couild  not be depended on to be sympathetic to whining investors--and if the attorney doesn't think he can win a contingency case he is very unlikely to take the case.

If any of you had to apologize for the tech bubble you're not worthy of being in the business--only a fool would have fallen for the "It's a whole new economy" nonsense of that era.

Wow, that's really great stuff.  I really like the way you explained that.

However, the one thing I see missing is what I think is probably the biggest obstacle that I will face if I sign on to MS.  That obstacle is finding qualified people who will allow me to go through that "process" with them in the first place.  I have no doubt in my abilities to do what you just explained (because I've done that sort of thing all my life in one form or another,) but I do have a lot of doubt in my ability to find enough prospects. (because I have never ever done anything like that at all.)


[quote=BondGuy]

Finding the money and managing the money are two different tasks. Most advisors utilize a multi-channel prospecting process. The most popular are networking, centers of influence prospecting, and referral promotion. The least popular by far is cold calling and direct mail. Somewhere in the middle is seminar prospecting. Ironically, cold calling is still very effective and if well executed will lead to success.

If I was starting today I would use a combination of cold calling ,direct mail, and seminars. I'm a big believer in networking, relationship selling, and COI prospecting, but believe that the lead time to get traction won't be there for a trainee. While the contract says they'll pay you a salary for two years, the reality is that you'll have to meet benchmark production/AUM goals long before that time.

I wish I could say it's easy, it's not. When it comes to finding the money, I wish I could say there are a thousand ways to skin a cat. There aren't. But there are a couple dozen ways to get this done. You won't be comfortable with any of them. That's Ok, that knot in your stomach is healthy, normal, and one hell of a motivator. Find the channel you'll  be most comfortable with and give it all you've got. Don't be afraid to fail. Ok, the group knows what's coming next; without risking failure and failing you can not possibly find out what will work for you. So, repeat after me "Get out there and fail !"

[quote=BondGuy]

Finding the money and managing the money are two different tasks. Most advisors utilize a multi-channel prospecting process. The most popular are networking, centers of influence prospecting, and referral promotion. The least popular by far is cold calling and direct mail. Somewhere in the middle is seminar prospecting. Ironically, cold calling is still very effective and if well executed will lead to success.[/quote]

[quote=mktsystms][quote=BondGuy]

Finding the money and managing the money are two different tasks. Most advisors utilize a multi-channel prospecting process. The most popular are networking, centers of influence prospecting, and referral promotion. The least popular by far is cold calling and direct mail. Somewhere in the middle is seminar prospecting. Ironically, cold calling is still very effective and if well executed will lead to success.[/quote]

Do FAs have to pay for putting together the direct mail campaign, or do the wirehouses cover that expense?  (I guessing that it's on the FA's nickel, but I had to ask anyway)
[/quote]

Who pays is case by case and detiremined by the BOM. Most managers are willing to help new trainees. This works for the new trainee in several ways. The manager won't support any program they personally don't believe in. This leads the trainee to marketing channels the BOM supports. BOMs are likely to give total financial support to these channels freeing the rookie to supply the human horsepower. Following the BOMs wishes pays huge political divdends. Especially hady when negotiating for funding. And not a bad place to be if you find yourself in a borderline situation. The one downside is whatever the BOM has in mind might not fit with what you want to do. Negotiate.

As for direct mail, think big, 5000 pieces a month, with a response required. A one percent response rate will get the job done. Anything less is a failure, and means it's time to change ONE variable with the next mailing ie, who you are sending it to.

I know in my area, seminars are oversaturated.  Everyone and their mother is offering seminars.  What has been really effective is email introductions.  I have a client who emails a few people saying that I did a good job for them and that I know investments better than anyone.  My client copies me on the email.  Email has been a very non threatening approach that works because it is a very soft approach. 

Introductions(hottest to coldest)

- face to face ("Hey 'prospect' this is my buddy and financial advisor, he's the man to talk to about investments.") - then I call prospect for appointment

- Phone call intro ("Hey 'prospect' my buddy and financial advisor has done really good for me.  Give him some time to see if he's right for you") - then I call the prospect for appointment

- Email intro (like I mentioned above).  If prospect replies back favorably, I'll call him for appointment

If I get 30 of these per week, 7 appointments will be booked.  The hotter the introductions, the easier it is to sell on appontments.  I don't sell myself or service on the phone.  I only sell the appointments.  If they come in, they are ready to "dance" with me.

[quote=JimmytheRocker]

I know in my area, seminars are oversaturated.  Everyone and their mother is offering seminars.  What has been really effective is email introductions.  I have a client who emails a few people saying that I did a good job for them and that I know investments better than anyone.  My client copies me on the email.  Email has been a very non threatening approach that works because it is a very soft approach. 

Introductions(hottest to coldest)

- face to face ("Hey 'prospect' this is my buddy and financial advisor, he's the man to talk to about investments.") - then I call prospect for appointment

- Phone call intro ("Hey 'prospect' my buddy and financial advisor has done really good for me.  Give him some time to see if he's right for you") - then I call the prospect for appointment

- Email intro (like I mentioned above).  If prospect replies back favorably, I'll call him for appointment

If I get 30 of these per week, 7 appointments will be booked.  The hotter the introductions, the easier it is to sell on appontments.  I don't sell myself or service on the phone.  I only sell the appointments.  If they come in, they are ready to "dance" with me.

[/quote]

JimmytheRocker strikes again with more good stuff. A system everyone can clone. Thanks JtR

" I'm a big believer in networking, relationship selling, and COI prospecting, but believe that the lead time to get traction won't be there for a trainee."

Above is definitely true.  I wouldn't get into the biz if I didn't have a working spouse or 5 months living expenses.  I know if I didn't have either, I'd look desperate and be totally broke.